1.) Padding/Margin -
Outlook 2007 simply doesn't play well with padding, and doesn't display it the same as other email clients. It can cause not only horizontal breaks, but also vertical breaks (and other ugliness). If you will be using padding, use it only in the <TD> line, as it will not display in a <DIV> or <P> within Outlook 2007. Also, padding must be the same within adjacent <TD>'s for Outlook 2007 to display correctly.
Fix: Although <DIV>'s with the Margin style work very well, they're not 100% compatible (Windows Live/Hotmail does not support margin). If you're not concerned about users of Hotmail/Live, then Margin is your best route. Otherwise, for 100% compatibility use nested tables with width's smaller than the cell and centered. Also try using nested tables with a single <TD> with padding.
2.) Table Borders
Yes, even adding borders between various rows and columns can cause problems depending on the setup you're using.
Fix: This is a tough one to explain how NOT to cause breaks within your document, but I believe I've received the best results from either nesting tables inside of <DIV>'s, or nesting tables inside of tables. From there, I add my borders into the nested object to prevent it from causing another object to break apart. Again, this is hard to explain without showing an example
In the end, their program took leaps back in design capabilities.
Fix: Write them until they change it
Please reply with any additional information you find, and I'll add it to the list.
Thanks Brian for a very informative post, that's really helpful for designers.
Bump - added a contributing problem with padding and Outlook 2007.